Meat packer JBS agrees joint venture with Indonesian wealth fund arm

Brazilian meat packer JBS ​has agreed a joint venture with PT Danantara (DIM), ‌an arm of Indonesia’s sovereign wealth fund, to pursue investments in protein production across Indonesia, Southeast Asia, Australia and New ​Zealand, it said on Friday (7).

The venture will include ​a $2.5 billion investment from the Indonesian fund and ⁠will hold JBS’s existing Australia and New Zealand ​businesses, JBS said in a securities filing.

• Once fully funded, ​the venture plans to raise up to $2.5 billion in additional debt financing.
• DIM will pay an initial $800 million at closing, with the ​remaining invested over up to three years thereafter.
• JBS ​will contribute 100% of its Australia and New Zealand businesses.
• For the ‌first ⁠two years after closing, DIM investment funds may only be deployed into Indonesia’s protein production sector.
• Parties have agreed a mutual five-year lock-up and intend to pursue an ​initial public ​offering (IPO) of ⁠the joint venture.
• Completion is subject to regulatory approvals and other customary closing conditions, JBS ​said.
• The transaction is a creative way for ​JBS ⁠to keep its growth and M&A agenda moving “while preserving cash at a moment when the balance sheet appears ⁠more constrained,” ​J.P. Morgan said in a ​research note.

Source: Reuters

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